United States Government Debt Essay

1353 words - 6 pages

Government Debt
The history shows that the United States, from its beginning 1790 to present, has been free of a national debt only 2 years, 1834 and 1835.the government debt has grown from 75.5 millions in 1790 to 13.5 trillion 2010. The government debt growth is extremely alarming due to its rapid and huge growth over a year. The US national debt clock shows that the national debt growth rate is about $50000/1seconds. Every day we watch news or we read news about government debt, the news reporter, politics, and economist talk how bad the national debt hurt the economic and how it fact the people, however; for a better understanding of government debt and the significance of those ...view middle of the document...

Since the deficits are financed by government borrowing, national debt is equal to all government debt outstanding.
Understanding the definition of national debt is the first step to comprehend what going on the government debt and how it impacts the nation and the world as whole, now we need to understand how the debt is created or how it originates. First, government creates budgets to determine how much it needs to spend to run a nation. Oftentimes, however, a government may run a budget deficit by spending more money than it receives in revenues from taxes (including customs duties and stamps). In order to finance the deficit, governments may seek to raise money by taking on debt, that is, by borrowing it from the public. National debt depends on the nation’s annual budget. When the government spends more than the money the government raise, the deficit creates more debt. Today, US national Debt is over $14trillion, it is the highest national debt compering to the rest of the world. So, how is the notational debt affecting the people of United States example their social security and the military?.
How social security impact the government debts? Before answer that question one need to know what is social security and how it works. According to Investorwords website social security is defined as the comprehensive federal program of benefits providing workers and their dependents with retirement income, disability income, and other payments. The social security tax is used to pay for the program. Social security tax payment vary for each individual, the payment depend if you work for someone or self-employed and also how much you earn. The Social Security taxes that workers pay into the system are used to pay for Social Security benefits. Normal employees pay tax 6.2% of wage or salary and employers pay 6.2% ant 1.45 for the Medicare. Every month the payroll tax paid by employer and employee goes to social security trust fund. That money is being used to pay monetary benefits for disable and elder retired people. There is a big controversy on how the social security impact the National debt, some Politicians and economist argue that the pay roll tax paid by people is not enough to cover the benefits; however that lead to increment on national debt. Therefore, the government must find way to solve it, some politicians suggested that the tax rate should be increase, retirement benefit should be reduced and retirement age should be increase to 70. On the other hand, some economists and politicians believe that there is no problem on social security, the pay roll tax paid by workers is just enough to cover the social security benefits, as matter of fact it should have surplus, because there is always more people paying tax than people getting tax benefit. If there is debt on social security is because that the government uses the social security fund to pay other expense such; medicare, unemployment and welfare, defense, healthcare and so....

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